Report No. 2011-14
April 2011
Complete Report
Findings in the audit of the city of University City
Trash Service Billing and Collection
Although the city has made a concerted effort to improve collections, 3,373 citizen accounts for trash service were delinquent as of June 2010, totaling $1.6 million. Without collection enforcement, customers have less incentive to pay their accounts, which may reduce city revenues and increase the rates charged to paying customers.
Employment Contract
The city paid $97,400 in severance pay to its former City Manager and included the same severance package clause in the new City Manager's employment agreement. If the former City Manager's termination date had been just 8 days later, the city would have saved $28,600.
Cost Allocations and Administrative Transfers
The city allocated over $900,000 in costs to various departments based upon estimates and without adequate supporting documentation. This makes it difficult to determine if the individual department or program is charged the right amount for the benefit it is receiving.
Legal Services
The city paid outside law firms over $230,000 in fiscal year 2010 (FY10), including $43,000 for City Attorney services, but it has not done an analysis to determine if outsourcing legal services makes fiscal sense. The city did not solicit proposals for legal services to make sure it gets the best value and does not have written agreements with its legal services providers. The city retained the City Attorney on a contingency fee basis to represent it in a class-action lawsuit, but there is no documentation the City Council formally approved the retainer agreement or had it reviewed by an independent attorney until 5 years after it was signed. To avoid conflict of interest concerns, an independent attorney should review any contracts between the city and City Attorney. The city paid $146,000, including legal fees, to settle a discrimination case, instead of only paying the $15,000 deductible, because it failed to notify its insurance company promptly.
Parking Garage Operations
The city does not adequately supervise the operations of the parking facility. Monthly reports of receipts and disbursements do not contain detailed supporting documentation, making it difficult to determine if all receipts are accounted for and all disbursements are necessary. The city has not conducted an analysis to determine whether outsourcing management of the parking facility makes fiscal sense and has not rebid the contract since 1997.
Accounting Controls
The city needs to improve its accounting controls in order to ensure transactions are accounted for properly. When the Collector's Office collects monies from other departments, the amounts are not immediately verified and entered into the system, and receipt slips are not given to the departments. The Community Development Department does not adequately segregate duties, and some departments do not account for the numerical sequence of receipt slips. Bank reconciliations are not performed timely. Services are provided to local businesses without first ensuring there are adequate funds in the businesses' escrow accounts.
City Budget and Financial Reports
The Finance Director increased the fiscal year 2011 budgeted expenditures by $276,000, after the budget had been approved by the City Council. The City Council only receives quarterly financial reports, which impairs its ability to make effective management decisions.
Minutes, Meetings and Public Records
The City Council did not document the reasons or the votes regarding meeting closures, as required by state law. The city should maintain a public request log to document its compliance with the Sunshine Law and should ensure copies of meeting minutes of affiliated boards, committees, and commissions are maintained by the City Clerk.
Personnel
The city salary survey did not use cities of comparable size, so it is unclear if salaries are in line with salaries in similar cities. The city did not comply with its regulations regarding vacation and sick leave accumulation limits.
Emergency Plan
The city does not have an approved formal emergency contingency plan for its computer systems. The city relies heavily on technology and needs to plan for a rapid recovery from disasters or other extraordinary situations.
In the areas audited, the overall performance of this entity was Fair.*
American Recovery and Reinvestment Act 2009 (ARRA or Federal Stimulus)
The city was awarded over $3.4 million in ARRA funds in four grants:
*The rating(s) cover only audited areas and do not reflect an opinion on the overall operation of the entity. Within that context, the rating scale indicates the following:
Excellent:
The audit results indicate this entity is very well managed. The report contains no findings. In addition, if applicable, prior recommendations have been implemented.
Good:
The audit results indicate this entity is well managed. The report contains few findings, and the entity has indicated most or all recommendations have already been, or will be, implemented. In addition, if applicable, many of the prior recommendations have been implemented.
Fair:
The audit results indicate this entity needs to improve operations in several areas. The report contains several findings, or one or more findings that require management's immediate attention, and/or the entity has indicated several recommendations will not be implemented. In addition, if applicable, several prior recommendations have not been implemented.
Poor:
The audit results indicate this entity needs to significantly improve operations. The report contains numerous findings that require management's immediate attention, and/or the entity has indicated most recommendations will not be implemented. In addition, if applicable, most prior recommendations have not been implemented.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
